ProCap Financial, the publicly traded Bitcoin treasury firm led by prominent crypto figure Anthony Pompliano, is actively buying back its own shares amid a significant decline in its stock value. The company aims to benefit shareholders by aligning its market net asset value (mNAV) with its actual asset value. Recent trades indicate that ProCap Financial’s shares are currently valued noticeably lower than the assets they represent, prompting this strategic move.
As of the recent trading day, ProCap Financial repurchased 148,241 shares of BRR, amounting to approximately $359,000. The company’s net asset value, which encompasses its cash and Bitcoin holdings after accounting for convertible debts, stands at around $305 million. In stark contrast, its current market capitalization is reported to be under $202 million.
In a statement, Pompliano, who serves as the firm’s chairman and CEO, emphasized the value in buying shares trading at a discount to their intrinsic worth. “We were able to buy $1.00 of our stock for approximately $0.65 last week,” he noted. Pompliano expressed a commitment to aggressively purchasing shares while they remain undervalued, solidifying the firm’s priority of maximizing shareholder value.
The practice of repurchasing shares when mNAV dips below 1 is not new in the cryptocurrency treasury sector. Companies often find that acquiring their own shares is a more favorable alternative to purchasing additional crypto assets at such times. Historically, significant players in the market, like MicroStrategy, have traded above their underlying asset value. However, the declines in major cryptocurrencies, including Bitcoin and Ethereum, have similarly affected the valuations of various digital asset treasury firms, resulting in many stocks now trading below their net asset values.
ProCap Financial currently holds 5,007 BTC, valued at approximately $325 million. The firm began repurchasing shares back in December, and by early February, it had successfully reacquired about 2% of its outstanding shares. Pompliano previously invested $1 million of his own funds into buying shares of the firm, stating his belief in the importance of having “skin in the game” for company leaders.
Despite these efforts, shares of BRR have seen a significant decline, finishing the day at $2.42. This represents a 76% drop over the past six months and an 85% decrease from last year’s peak. For Pompliano to earn personal equity compensation as per the firm’s structure, BRR shares would need to surge approximately 520%.
Bitcoin prices have also faced volatility, experiencing a nearly 4% drop in the last 24 hours and currently hovering around $64,888—almost 49% lower than its peak price of over $126,000 achieved in October.
